Supercharged Supply Chains

CHAPTER 12Capacity Planning: Short, Medium, and Long Term

Much has been written about capacity planning. A popular message is to find and eliminate the constraint and then move on to the next one. While this is good in theory, capacity planning must first answer the question of whether the production area can reliably execute the proposed schedule. The capacity constraint may change when the schedule changes or when the product mix changes. In fact, a schedule change could result in multiple constraints. This chapter is about using the Business Excellence Planning process, Figure 12.1, to identify and resolve capacity constraints related to the schedule presented. Management must be able to identify the constraints, eliminate those constraints, or change the schedule. If those options are not addressed, the schedule is invalid, the churn begins, and life gets worse!

FIGURE 12.1 Business Excellence Planning

Material Requirements Planning (MRP) is priority planning driven by dates. The planning system believes, without question, that the data that it has been given is accurate. Effective MRP requires, as discussed in previous chapters, data accuracy, a valid Master Schedule and Demand Plan, both aggregate and detailed, and detailed schedules that are reasonably accurate to the best of the company's knowledge. In order to have an overall “valid” plan (accurate and achievable), ...